Submitted By: J.
Answered: January 27, 2017 9:00 am

A residence that had been held in a grantor trust was sold following the death of the grantor. The sale price was less than what the grantor paid for the home years ago. Is there a taxable loss?

When a taxpayer dies, the tax basis of the property is the value of the property on the date of death. As such, if property is sold for this date-of-death value, there is no gain or loss.

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Tax Glossary

Installment sale

A sale of property that allows for tax deferment if at least one payment is received after the end of the tax year in which the sale occurs. The installment method does not apply to year-end sales of publicly traded securities. Dealers may not use the installment method. Investors with very large installment balances could face a special tax.

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